Mattel posts smaller-than-expected loss as Barbie woes abate

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Mattel Inc. rose in late trading after sales declines at two of its most troubled brands slowed and it posted a smaller first-quarter loss than analysts projected.

The world's largest toy maker said Thursday that its loss was 8 cents (U.S.) a share, excluding some items. That was better than analysts' estimates for a loss of about 10 cents. Revenue fell 2.5 per cent to $922.7-million, topping analysts' $900.5-million average projection.

Mattel is undergoing a management shakeup under chief executive officer Christopher Sinclair, who replaced Bryan Stockton on an interim basis in January and was made permanent earlier this month. Sinclair, a long-time board member, has first focused on reducing bureaucracy to improve product innovation.

The toy maker's biggest problem brand, Barbie, showed signs that the worst of its sales declines may be over. The unit's sales fell 14 per cent, slower than the 16-per-cent drop they had last year. Sales at Fisher-Price slid 2.7 per cent after a 13-per-cent plunge in 2014.

"It's not a great quarter by any means, but it's also not the disaster many were expecting," said Sean McGowan, an analyst at Needham & Co. Mattel also didn't cut its dividend, which some observers had expected, he said.

The stock rose 6.8 per cent to $26.98 at 5:02 p.m. in late trading in New York. The shares declined 18 per cent this year through Thursday's close, compared with a 2.2-per-cent advance for the Standard & Poor's 500 index.

Mattel continued to be hurt by the strength of the dollar. The company generates about half of its sales outside North America, and revenue from abroad is worth less when the dollar gains in value. Instead of falling, sales would have gained 5 per cent if the effect of currency fluctuations was taken out, the company said.

Currency effects will reduce sales by as much as 6 per cent and earnings per share by as much as 35 cents this year, executives said on a conference call.